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Vanguard Health Systems, Inc. Announces Sale of Three Orange County Hospitals to Prime Healthcare Services, Inc.

Vanguard Health Systems, Inc. ("Vanguard") and Prime Healthcare Services, Inc. ("PHS") announced today that Vanguard, through its subsidiaries, has signed a definitive agreement to sell three acute care hospitals in Orange County, California to PHS. The sale includes 131-bed Huntington Beach Hospital, Huntington Beach, CA; 141-bed La Palma Intercommunity Hospital, La Palma, CA and 219-bed West Anaheim Medical Center, Anaheim, CA.

Vanguard believes that selling the three hospitals to a locally-based California company with a history of operational success is the best outcome for the communities, the medical staffs and the hospitals' employees and volunteers. The sale of the hospitals enables Vanguard to allocate resources to its existing core markets of Arizona, Illinois, Massachusetts and Texas.

PHS, founded in 2001, owns and operates four acute-care hospitals in Southern California and intends to further expand its presence in Southern California with the acquisition of the three Vanguard facilities. PHS most recently acquired 102-bed Montclair Medical Center in Montclair, California. PHS uses a physician-driven model that integrates physician participation in all levels of hospital operations. Its mission is to provide comprehensive quality healthcare in a compassionate, convenient and cost-effective manner.

PHS has indicated to Vanguard that it intends to offer employment to all current hospital employees, maintain all three facilities as acute-care hospitals with core services including emergency care and to continue historical levels of charity care.

The sale is expected to be completed in the next 30-60 days. Terms of the sale were not disclosed.

About Vanguard Health Systems

Vanguard Health Systems, Inc. owns and operates 19 acute care hospitals and complementary facilities and services in Chicago, Illinois; Orange County, California; Phoenix, Arizona; San Antonio, Texas and Massachusetts. The Company's strategy is to develop locally branded, comprehensive healthcare delivery networks in urban markets. Vanguard will pursue acquisitions where there are opportunities to partner with leading delivery systems in new urban markets. Upon acquiring a facility or network of facilities, Vanguard implements strategic and operational improvement initiatives, including expanding services, strengthening relationships with physicians and managed care organizations, recruiting new physicians and upgrading information systems and other capital equipment. These strategies improve quality and network coverage in a cost effective and accessible manner for the communities we serve.

About Prime Healthcare Services

Prime Healthcare Services, Inc. is a diversified health care management company based in Victorville, CA. It owns and operates Desert Valley Hospital in Victorville, CA that received an unprecedented accreditation with "commendation" from JCAHO in its first year of operation and has been ranked nationally as a "Top 100 Hospital" by Solucient and Modern Healthcare Magazine, in both 2003 and 2005. PHS also owns and operates Sherman Oaks Hospital and the world renowned Grossman Burn Center in Sherman Oaks, CA; Chino Valley Medical Center in Chino, CA and Montclair Hospital Medical Center in Montclair, CA.

This press release contains forward-looking statements within the meaning of the federal securities laws, which are intended to be covered by the safe harbors created thereby. These forward-looking statements include all statements that are not historical statements of fact and those statements regarding the Company's intent, belief or expectations. Do not rely on any forward-looking statements as such statements are subject to numerous factors, risks and uncertainties that could cause the Company's actual outcomes, results, performance or achievements to be materially different from those projected. These factors, risks and uncertainties include, among others, the Company's high degree of leverage; the Company's ability to incur substantially more debt; operating and financial restrictions in the Company's debt agreements; the Company's ability to successfully implement its business strategies; the Company's ability to successfully integrate its recent and any future acquisitions, including the transactions in connection with which this tender offer is being conducted; the highly competitive nature of the health care business; governmental regulation of the industry including Medicare and Medicaid reimbursement levels; changes in Federal, state or local regulation affecting the health care industry; the possible enactment of Federal or state health care reform; the ability to attract and retain qualified management and personnel, including physicians and nurses; claims and legal actions relating to professional liabilities or other matters; changes in accounting practices; changes in general economic conditions; the Company's exposure to the increased amounts of and collection risks associated with uninsured accounts and the co-pay and deductible portions of insured accounts; the impact of changes to the Company's charity care and self-pay discounting policies; the ability to enter into managed care provider and other payer arrangements on acceptable terms; the efforts of insurers, managed care payers, employers and others to contain health care costs; the availability and terms of capital to fund the expansion of the Company's business; the timeliness of reimbursement payments received under government programs; the potential adverse impact of known and unknown government investigations; and those factors, risks and uncertainties detailed in the Company's filings from time to time with the Securities and Exchange Commission, including, among others, the Company's Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q.

Although the Company believes that the assumptions underlying the forward-looking statements contained in this press release are reasonable, any of these assumptions could prove to be inaccurate, and, therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, you should not regard the inclusion of such information as a representation by the Company that its objectives and plans anticipated by the forward-looking statements will occur or be achieved, or if any of them do, what impact they will have on the Company's results of operations or financial condition. The Company undertakes no obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.